Play Money: Do your kids know how to save money?

Everyone parents wants what is best for their kids. Whether you're talking about college plans or finding the best grade school beyond the public option, parents plan accordingly so kids are well taken care of for the foreseeable future. But one aspect of planning that goes unnoticed often is money, saving it and how moms and dads can take the average child and turn them into someone that is a little more savvy as they get older, into their teens, and create a competent adult was it pertains to how they function money wise for the rest of their life. You may be thinking that is a bit much as far as driving home the point to a four year old how to balance a checkbook or the importance of a savings account and planning for retirement before they even get to kindergarten. For instance, free money doesn't exist as an adult, for the most part, so why should that be the case with kids or young adults? Moms and dads shouldn't get in the habit of shelling out free money just for the sake of doing so. That so called allowance should be tied to something tangible for often than not, such as a chore or something that was done that deserves to be rewarded financially. This gives them the impression that money is related to work, which is true and will allow them to value the dollar more so than expecting a handout or not relating money as something that is earned and not subsequently given. In turn, money means more to kids. They'll save it, appreciate it and not be so quick to spend it if they've spent their time working to get it. Handing them money doesn't allow them the opportunity to see it in the right light. And when it comes time for kids to buy something they want, they use their own money. That teaches the value of saving, not spending and impulse buying that leaves you with little or no money. If they want something, they'll spend their own money and might be more inclined to hold off and start saving, even if it just to have money set aside or for a purchase they want that is larger. Some parents even think further outside the box and give their kids bills. Now, we're not talking about gas or cable, but rather a credit card with a modest limit on it that the kids are responsible for paying with their money and based on the work parents give. Moms and dads are essentially cultivating an atmosphere where the child is learning work versus paying and running a small, modest lifestyle to adapt to as they get older and recall from memory. This isn't to suggest that your kids should grow up too fast in terms of saving money and spending but rather teaching them a few pointers to put them ahead of the game as they become adults who can manage money accordingly.